By-Difference Allocation Dispute

Analysis to Resolve a By-Difference Allocation Dispute

Accord carried out an analysis of the mass balance and hydrocarbon production allocation on a North Sea hub platform, with a focus on one field's, (Field A) production. Our client, Company A, as non-operators, transport oil and gas from their Field A satellite platform to the hub platform, operated by Company B.

The allocation method involves subtracting all other users' production from the total hub export and allocating Field A by difference. Field A’s inflows are measured using non-fiscal flow meters which are considered to be of a lower quality than the other fields’ measured flows.

A Joint Venture audit found a systematic discrepancy in that Field A’s measured hydrocarbon production was greater than its allocated production at the hub over several years. Despite various corrective efforts, the imbalance persisted, suggesting a potential misallocation issue.

Accord's analysis, covering data over a two-year period, highlighted potential causes of the imbalance, including under-measurement by the hub's fiscal gas export meters due to contamination of orifice plates. The analysis showed that the imbalance correlated with these contaminated meters, which consistently under-read flow rates. The findings were contested by the operator, who attributed the imbalance to allocation uncertainty and emphasised the rigorous auditing of fiscal meters. However, further examination indicated that post-cleaning of the meters improved the imbalance temporarily, supporting the contamination hypothesis.

The report concludes that systematic bias, likely due to the contaminated export meters, led to the misallocation of Field A’s production.

The project required specialist knowledge in allocation engineering and measurement. Accord assembled an integrated team to deliver the necessary expertise.

Accord's team conducted a comprehensive analysis of the provided data using recognized statistical methods. This analysis, combined with practical field measurement experience, enabled the team to pinpoint the most likely issues.